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To Answer Your Questions...

By Joe Ponzio on July 12, 2007  |  3 comments

It is not easy running a new blog. Being just 17 posts young, F Wall Street has had more than 28,000 hits, has been reprinted on Yahoo! Finance, is quoted on CNBC's Buffett Watch, and more. Of course, there aren't enough posts to satisfy everyone's curiosity or interest, so I have been getting a ton of emails from visitors.

I'll continue responding to emails, but I would like to post my answers to some of the common questions people have from the contact page.

Is Berkshire Hathaway a "buy" at this price?

People want to know—and I don't blame you. I ran an analysis and will be posting it tomorrow. You can see my analysis here.

Who am I?

I will be adding an "FAQ" and/or "about me" page in the next few weeks. In the meantime, you can learn more about me and about F Wall Street here. I don't have an "about me" or a "FAQ" section up yet because, well, let me explain in the next post...

What is F Wall Street?

I originally launched this site to supplement the lessons in my book, F Wall Street—a book that is currently being reviewed by agents and won't be ready for publishing for a year or so. The plan was to launch the blog and have a year's worth (or more) of posts, information, and analyses available for the future readers of the book. I got the site launched with the intention of adding the "about" and "FAQ" sections at a later time.

To be honest, I did not expect more than two or three visitors (let alone thousands) a day nor did I plan on marketing the site until the accompanying book was available.

What will I be discussing?

Let Wall Street bore you with facts; I'll try to stick with the truth. I'll be discussing value investing, buying businesses (through stocks), investing myths and misconceptions, and more. Let's face it—Wall Street has done a terrible job of managing money for the "little guy".

My goal is to help you change your perspective on investing. I'm not any smarter than you; and yet, I can patiently, calmly, and confidently invest in stocks and ignore the stock market. I don't take big risks. I don't worry about my money. I will be discussing why—and how you can change your perspective so that you can achieve the same thing.

What other companies do I like?

Other than the companies I discuss on the blog, I won't be giving out any stock tips. My goal is to give you the tools and information you need so that you can do it on your own. Following me into or out of a stock does you no good if you can't understand why I am buying, holding, or selling. In addition to not giving stock tips, I won't try to predict the stock market.

--

That answers most of the common questions I've been hearing. Feel free to keep sending those emails, and don't be afraid to comment on a post or two. If you have questions, ask! Otherwise, you may never see your answers here.

Thanks all for visiting!

Written by Joe Ponzio on July 12, 2007

Joe Ponzio is the managing partner of the Ponzio Investors Funds and owner of Ponzio Capital Inc, a registered investment advisory and deep value portfolio management firm. The author of F Wall Street (the book and the website), his articles have appeared in hundreds of financial media, including Financial Planning Magazine, CNBC.com, Yahoo! Finance, and Reuters. He has appeared numerous times nationally on both radio and television, and has presented at universities and seminars across the United States.

Read more articles like this online at www.fwallstreet.com.
To learn more about Joe's portfolio management services, visit www.ponziocapital.com.
The Discussion
kunal' gravatar

kunal
Jul 18th, 2007
1 comment

Dear Sir,
I would like to what free cash flow means?

Does it mean cash from operational activities.
I am an Indian Investor.
Kunal,

Free Cash Flow is the excess cash that can be generated from a business' operations. A business collects money from sales, pays its bills, and buys or repairs equipment. The cash that is left over from that process is "Free Cash Flow"—the money that can be used to fuel growth or pay to shareholders.

Free Cash Flow is not exactly the "Cash From Operational Activities" because that does not take into account the "buy and repair equipment" portion of the business' operations (the "capital expenditures").

I'm not sure what the financial statements look like in India, but U.S. companies provide us with a Statement of Cash Flows. With a little reorganization, we can find the free cash flow of a business in a matter of seconds.

You can see the calculation in my comment here.
Sanjay Shetty' gravatar

Sanjay Shetty
Sep 11th, 2007
24 comments

Hi Joe,

I'm another Investor like Kunal from India. I'm also keen to understand the calculation for Free Cash Flow.

They do have Cash Flow statement. However would be great if you can confirm the calculation for me.

Here's the site I'm using with an example company called Fag Bearings

From my understanding to get FCF one would do the following from that page:

CASH FROM OPERATIONS - Capital Expenditure

Both of the above are given on adjacent lines one below the other.

Do let me know if my understanding is correct. Thanks for your help.
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